First-time homebuyers face growing competition

Brandie Gaines and her husband, Fred, have both lived in Oxnard their entire lives. Just like their parents, they wanted their 4-year-old daughter to continue calling the city home like several family generations before her.

But after searching four months for a home to call their own, it was starting to look like the couple would have to break that tradition — expanding their search to neighboring cities Ventura and Camarillo.

"The inventory really went down," said Brandie Gaines, a 35-year-old accountant who works in Carpinteria. "In November, hardly anything was coming out. It was like we were looking at houses and we were never the only people looking. ... It seemed like either investors or people that just have cash were coming and blowing us out of the water."

THR California, an affiliate of a giant private-equity firm, was one of those investors. The Gaineses competed directly against THR on the sixth house they put a bid on in Oxnard. The bids were the same — $385,000 — but THR offered cash.

"It's been very frustrating," Gaines said. "You go to this house and you liked it and you start thinking of yourself there ... and they turn around and say no. You just have to let it go and move on, but it's hard."

THR California has purchased 101 distressed single-family homes and condominiums throughout Ventura County — spending more than $34 million over nearly the past five months with no indication of slowing. The company has purchased 42 properties in Oxnard, where the value of THR's purchases represented 9 percent of all November residential sales in the city.

"People are talking about this group and what they're doing," said B.J. Ward, a Ventura County Realtor and owner of Ventura-based Comfort Real Estate Services. "Realtors are torn with it. They're sending in offers that no one else can compete with ... that's the best-case scenario when we're representing sellers. The buyers' end can be a little bit frustrating."

Representing a seller, Ward recently closed a sale with THR after the company made a cash offer on an Oxnard home $11,000 higher than the asking price. There were about 12 offers on the home — half were investors, the other half were families or couples hoping to move into the house at 616 Calle Laguna, Ward said.

"As Realtors, we're proponents of homeownership and having a roof over your head," Ward said. THR is "buying these cases and providing rental housing. THR is coming in and kind of filling that void. They're still providing an opportunity for people to have a roof over their head."

But when it comes to Ward's clients looking to become first-time homebuyers, including the Gaineses, THR's "strong presence in the market" is another factor hindering buyers in a local housing market already plagued with low supply, Ward said.

"THR is just more competition," he added. "It's an overwhelming number of buyers that are out there and a very diminished number of homes that are viable for sale. THR or no THR, it is difficult to get buyers into (homes)."

After months without success, the Gaineses took Ward's advice and started increasing their starting bids over the listed price to make their offers more competitive.

The couple's luck finally turned with the eighth house they had bid on since August. After making an initial offer slightly higher than the list price, Gaines and her 37-year-old husband increased their offer by $17,000 over the asking price.

"It wasn't my No. 1 location, but it had some other things that made it worth it," Gaines said — including a nearby school that would carry her daughter through eighth grade, a park around the block and a cul-de-sac location with less traffic. "It didn't matter where it was; we were ready to go to battle for it."

And they did. The Gaineses will move into their new home at the end of January and Bailey, 4, will grow up in Oxnard, just like her parents, grandparents and great grandparents.